10-19-2004, 09:43 PM
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Well, i think that i should elaborate my question. As for as the non recognition of dividend declared after the balance sheet date as a liability is concerened, i understand its logic in the light of IAS 10.
Final cash dividend is always declared after the balance sheet date in the board/directors meeting keeping in view the profits of immdiately preceeding financial year. Let me explain it through practical example.
Directors of OGDCL declared final cash dividend of RS 1.25/share for the year ended 30 June 2004 in their board meeting which was held on 22nd september. If you see at Annual Report 2004 of OGDCL, it reflects that dividend declared after the balance sheet date has been adjusted in the accounts of 2004. Apart for OGDCL report you can see Annual Reports of DG KHAN Co Ltd, it also reflects that dividend declared after the date of balance sheet has been adjusted.
Now the question arises, are they unaware of treatment of IAS 10? or you are not interpreting IAS 10 properly?.
Waiting for reply from professionals or seniors.
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They are very well aware of treatment under IAS 10 Ali, but 4th Schedule (applicable to 30th June 2004) requires the dislosure of proposed dividend as liability. Now in the case of dividend the requirements of IAS and Ordinance differ.
If you look at the accounting policies of both the companies you have mentioned, under the heading "Statement of Compliance" it is clearly written that
"where the requirements of IASs and Ordinance differ, the requirements of companies ordinance take precedence"
SMR
Well, i think that i should elaborate my question. As for as the non recognition of dividend declared after the balance sheet date as a liability is concerened, i understand its logic in the light of IAS 10.
Final cash dividend is always declared after the balance sheet date in the board/directors meeting keeping in view the profits of immdiately preceeding financial year. Let me explain it through practical example.
Directors of OGDCL declared final cash dividend of RS 1.25/share for the year ended 30 June 2004 in their board meeting which was held on 22nd september. If you see at Annual Report 2004 of OGDCL, it reflects that dividend declared after the balance sheet date has been adjusted in the accounts of 2004. Apart for OGDCL report you can see Annual Reports of DG KHAN Co Ltd, it also reflects that dividend declared after the date of balance sheet has been adjusted.
Now the question arises, are they unaware of treatment of IAS 10? or you are not interpreting IAS 10 properly?.
Waiting for reply from professionals or seniors.
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They are very well aware of treatment under IAS 10 Ali, but 4th Schedule (applicable to 30th June 2004) requires the dislosure of proposed dividend as liability. Now in the case of dividend the requirements of IAS and Ordinance differ.
If you look at the accounting policies of both the companies you have mentioned, under the heading "Statement of Compliance" it is clearly written that
"where the requirements of IASs and Ordinance differ, the requirements of companies ordinance take precedence"
SMR
